Reassessment invalidity for wrong sanction and limitation defeated proceedings under the new reassessment regime.

Approval from the statutorily designated specified authority is a jurisdictional precondition for reassessment under the new regime. Where the notice under section 148 and the order under section 148A(d) were issued after more than three years from the end of the assessment year, sanction had to come from the higher authority required by section 151; approval obtained only from the Principal Commissioner was insufficient, rendering the reassessment void ab initio. The Tribunal also held that the reassessment was barred by limitation, as the notice was not issued within the surviving time available after the assessee's response and the extended timeline could not sustain the proceedings. Both findings were in favour of the assessee.

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Issues: (i) Whether the reassessment notice under section 148 and the order under section 148A(d) were invalid for want of approval from the correct specified authority under section 151 of the Income-tax Act, 1961. (ii) Whether the reassessment proceedings were barred by limitation and had to fail on that ground.

Issue (i): Whether the reassessment notice under section 148 and the order under section 148A(d) were invalid for want of approval from the correct specified authority under section 151 of the Income-tax Act, 1961.

Analysis: For the relevant assessment year, the notice and the order under section 148A(d) were issued after more than three years from the end of the assessment year. In that situation, the approval had to be obtained from the higher specified authority contemplated by section 151. The record showed approval only from the Principal Commissioner, which was not the correct authority on the dates involved. The Tribunal also relied on the governing principles stated by the Supreme Court on the role of specified authority in reassessment under the new regime.

Conclusion: The notice under section 148 and the order under section 148A(d) were invalid for want of approval from the correct specified authority, and the assessment was void ab initio. The finding is in favour of the assessee.

Issue (ii): Whether the reassessment proceedings were barred by limitation and had to fail on that ground.

Analysis: The Tribunal applied the limitation framework governing deemed notices and the subsequent reassessment steps, including the effect of the legal fiction created after the original notice and the exclusion of the relevant intervening periods. On the facts, the reassessment notice was not issued within the surviving time available after the assessee's response, and the proceedings could not be sustained within the extended timeline.

Conclusion: The reassessment proceedings were barred by limitation. The finding is in favour of the assessee.

Final Conclusion: The reassessment proceedings could not be sustained because the statutory precondition of approval by the correct specified authority was not met and the notice was also hit by limitation.

Ratio Decidendi: In reassessment, approval from the statutorily designated specified authority is a jurisdictional precondition, and non-compliance with the applicable sanction and time-limit requirements renders the reassessment invalid.

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